• SNGPL warns of financial crisis, excess RLNG supply over captive power plants’ exit from gas grid
• Says policy allowing private competitors to profit while public utilities suffer losses
• Pakistan LNG seeks permission to import LNG, sell to CPPs
ISLAMABAD: In a new twist to IMF’s push for transferring industrial captive power plants (CPPs) to the national power grid through a hike in gas rates and supply disconnections, gas companies are crying foul over losing long-term clients to private competitors.
As if it was not enough, a state-owned enterprise has sought government clearance to import liquefied natural gas (LNG) to supply the CPPs if Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) fail to meet demand.
Sources told Dawn that Pakistan LNG Limited (PLL) proposed to the Special Investment Facilitation Council (SIFC) last week that it be allowed to import LNG cargoes and supply them to the industrial sector as SNGPL and SSGCL face a shortage of customers and want cancellation of contracted cargoes.
Sources said the Lahore-based SNGPL protested the PLL’s suggestion and the diversion of its clients to private shippers.
“How could an IMF conditionality be applied to an existing gas supplier and not on another company under the same Ministry of Energy or a private party?” a participant questioned, arguing that gas supply at a price not regulated by the Oil and Gas Regulatory Authority (Ogra) may instead encourage more CPPs to stay away from the power grid.
This has come days after the government increased gas prices for CPPs from about Rs3,000 per million British thermal units (mmBtu) to about Rs3,500 and imposed another 5pc levy to ensure these industrial plants have electricity generation parity with the national power grid.
The power division has already directed power distribution companies to sign new service standard agreements with CPPs to ensure uninterrupted electricity.
As part of its IMF commitments, the government had pledged to disconnect the gas supply to CPPs by January 2025, forcing them onto the national grid. However, until technical grid constraints are resolved, the government agreed to raise gas tariffs to match power costs.
The SNGPL demanded in writing that “any policy regarding the shifting of CPPs away from the gas grid to the national grid should be implemented across the board for public and private sectors”.
